SOCIAL sector has remained the most neglected sector. Riddled with bad governance, the country has been ignoring this sector. Carrying a history of wrong choices and inappropriate priorities, poverty has become an integral part of lives of a vast majority of citizens.

An analysis of budget figures from 1947 to 2,005, shows that development has received the lowest budget allocations, whereas combined expenditure on defence and debt servicing has been eating away the larger part of the pie.

During 1990-2005, the average share of health as per cent of GNP was 0.68 per cent and that of education 1.99 per cent, whereas defence spending stood at 4.6 per cent. Pakistan is ranked ninth among 117 market economies in terms of percentage of expenditure allocated to defence. Among 34 poorest economies, the country is ranked 17th in education and the last i.e. 34th in health in terms of allocations against total expenditure.

Education, health, drinking water and sanitation are major problems, yet they find the least attention of our policy-makers..

Multilateral donors have been extending loans to boost social sector allocations. However, wrong choices of decision makers, poor monitoring and regulation by donors and absence of vigilant civil society has resulted in less than desired outcomes.

The Asian Development Bank conducted an evaluation of its social sector lending of 20 years i.e. from 1985 to 2004. The report titled “Sector Assistance Programme Evaluation for the Social Sectors in Pakistan” confirms that huge loans and amounts spent did not matched the unsatisfactory physical performance..

The frequent change of governments also obviously left negative impact on continuity of policies and service delivery.

The ADB approved $11.9 billion of public sector loans for Pakistan over the 20-year period 1985–2004. At $1.9 billion, social sector approvals were 16 per cent in shape of 28 projects -- 10 educational ($470 million), five health and population ($198 million), four urban development and housing ($232 million), five water supply and sanitation ($323 million), and four multi-sector ($670 million).

The evaluation results reveal that out of 24 social sector projects assessed only eight per cent were judged to be successful and none was highly successful, with one third declared unsuccessful (33 per cent) and 58 per cent partly successful.

From a total approved amount of $1.9 billion for social sector operations, about $0.9 billion has been disbursed (excluding disbursements from approvals prior to 1985) and the remaining $1 billion being either cancelled or not yet disbursed.

The evaluation report identifies a list of causes of such poor performance of social sector loans. Some of them are as under:

There has been a general lack of meaningful government and other stakeholder involvement in project design—the involvement that occurred was insufficient to generate ownership and commitment. This lack of engagement during design contributed to delays in effectiveness (senior government officials only focus on the project after its approval by ADB) and, ultimately, a failure to fully achieve objectives.

All projects suffered implementation delays—this is, in part, a consequence of the lack of government engagement during design. That delayed implementation continues to be the norm indicates that this reality is not being addressed in project design.

There is a lack of analytical underpinning and problem analysis for projects is evident in project design documents, which results in projects not always addressing the real causes of the identified problems, or not addressing them in a sufficiently comprehensive manner to achieve the desired results.

Lessons from previous projects have not been fully incorporated—they may be acknowledged, but significant design changes or innovations to avoid past problems are usually not made. Follow-on projects are usually designed without an evaluation of the predecessor project, despite the obvious partial success of these in many cases.

There is a lack of clarity regarding the role of ADB in project administration vis-à-vis that of the government, with consequent unclear accountability.

There is no meaningful external funding agency co-ordination in education sector projects beyond avoidance of the worst duplication of effort. There is a lack of clarity among all parties about what donor co-ordination means in terms of outcomes. True co-ordination can only come from the government.

Successive projects were funded to increase the number of classrooms and to train teachers. However, the existence of hiring bans made it difficult, if not impossible, to increase the overall number of teachers. Consequently, the new facilities almost always operate well below capacity.

Under the primary education (girls) sector project, 80 per cent of the funds for physical infrastructure were used but only 28 per cent of those allocated for institutional development.

With little variation similar reasons have been identified as responsible for the poor performance. Interestingly institutions like the World Bank and the ADB approve project designs and a large of amount is often pocketed by their consultants yet they do not take responsibility of design failures.

The long process of project approval provides ample opportunity to vet all the project designs. Also all operational policies of the lending agencies are strictly ensured by the implementing agencies. During the project life, several missions of lending agencies also do visit projects. Given these realities, one can not simply blame the government departments for all failures.

Some other very important factors have also been highlighted where external agencies truly have very little control and these factors are critical for project performance.

Delay in project completion, which also results in cost over run, is a major cause of less than desired delivery of social sector projects. According to the ADB report, the average extension for all sectors in Pakistan was 2.3 years, the worst of any developing member country. Social sector loans performed slightly better-yet not satisfactory--had an average extension of 2.2 years. Of the 16 social sector loans approved since 1985 that have closed, all but one required one or more extensions to the loan closing date. The average number of extensions was 2.7 with an average total time of extension of 2.8 years (2.2 years for loans outside the social sector), which represents a 48 per cent time overrun on average.

Part of the reason loan closing dates need to be extended is the very long time required for approved loans to become effective. Tedious process of project approval and post-approval activities always makes projects victim of delayed start. Across all sectors, the average time for loans that became effective over 1985–2004 was 249 days. ADB expects that loans will become effective in 90 days—the actual time taken for education, health and population, and water supply and sanitation loans were 333, 443, and 295 days, respectively.

Rampant corruption of all sorts is another major cause of project failures and under-performance. Bureaucracy and other vested interested have invented highly sophisticated forms of corruption. Lack of transparency and absence of institutional accountability has made this country a heaven for money makers at the cost of development of poor citizens. The ADB Project Completion Report acknowledges corruption in one the projects- the Middle School Project which suffered from financial mismanagement involving an embezzlement of $1.03 million. The recently constructed schools are already looking dilapidated with cracks in walls and ceilings, broken flooring pitted with holes and grounds left rough and underdeveloped.

According to ADB report, the informants in the health sector indicated that commission payments for securing contracts were usually of the order of 20–35 per cent although this was a general observation not linked to any project in particular. Corruption also affects the public provision of social services. Of patients visiting hospitals, 65 per cent reported irregular admissions and 96 per cent of those who were admitted said they were victims of corruption. Hospital staff was identified as the key facilitators of corruption by 65 per cent of the users and direct extortion was reported in 60 per cent of the total cases of corruption. Lack of accountability and monopoly power were quoted as key contributing factors.

These examples are merely a few examples. With this state of affairs achieving the Millennium Development Goals seems a remote possibility.